In July, the Federal Housing Finance Agency (FHFA) announced that it had approved buyers for nearly 2,500 vacant Fannie Mae properties. Most of the winning bidders in this auction — the first of many needed to deal with the hundreds of thousands of vacant properties currently held in Fannie Mae and Freddie Mac’s portfolios — will operate their new acquisitions as rental properties.
For the country as a whole, these sales are part of the gradual “reset” of the housing market. But, for some of the communities that are home to these properties, their sales will represent a huge increase in the number of investor-owned properties within their local market.
At Community Progress, we know what can happen when a local real estate market is upended in this way: the participation of outside investors can create or dramatically worsen disparity between the haves and the have-nots. Absentee owners can let properties fall into disrepair, worsening blight, while speculators drive up prices that keep locals unable to buy properties in their own neighborhoods.
Fortunately, though, we also know that there are many ways cities and towns can deal with these dynamics creatively and productively, leveraging their own legal and social resources to ensure that a revitalized real estate market leads to a reenergized community. Simply enforcing local building codes, or enhancing them with newer tools, such as vacant property registration ordinances, can go a long way in ensuring that new investments are productive ones — for the buyer and the neighborhood.
Our website offers a number of great resources on this topic: from the latest and most comprehensive study of local vacant property registration ordinances around the country to a first-of-its-kind detailed accounting of the number of blighted properties in New Orleans, which sets an important benchmark for progress there. We’ve also been busy collecting stories from all over the country and are eager to get the word out about these best practices, share our own expertise and facilitate the exchange of knowledge between communities at different stages of dealing with this issue.
From Coral Springs, Florida, where specially trained volunteers help patrol for overgrown lawns and mildewed roofs and encourage compliance with local housing codes, to Boulder Colorado, where the job of code enforcement has been moved from the public works department to the police department, so swift responses can lead to fast action, communities are rethinking their approach to the way so-called problem properties are managed. More and more, municipalities are taking steps to address problems before they become serious enough to lead to long-term blight.
Community Progress’ work in New Orleans, where we’ve helped the city completely overhaul its system of code enforcement, is a leading example in this area. We’re proud to say that not only are blighted properties dealt with more swiftly than in the past, the enforcement process is also fairer and more efficient.
Coral Springs, Boulder, New Orleans — these are very different places, but their efforts share the goals of promoting public health, safety and quality of life. They also demonstrate how cities and towns can dramatically increase their capacity for dealing with the complex issues presented by vacant, foreclosed and problem properties. Often, they already have many or all the tools they need; they just need some help or advice in using them effectively.
It’s been our experience at Community Progress that when well planned, adequately staffed and placed within a sound strategy, code enforcement is a powerful tool — for neighbors and governments alike. Nuisance abatement helps prevent property values from collapsing and helps communities create the conditions that restore worth to properties – and to the properties of their neighbors on those blocks. Ultimately investors and lenders benefit too, since, as markets return to health, property values return to stability and more people re-enter the market as buyers or renters.
National efforts can have unintended consequences for local communities, but, with the right planning, they can also present new opportunities for growth and progress. We can help. Because that, after all, is what we’re all about achieving: Community Progress.